POST OFFICES – The genuine witness of the digital banking boom in our nation and the epitome of Indian history.
In the union budget 2022, Finance Minister, Nirmala Sitharaman, announced that all the 1.5 lakh post-offices in India would connect to CBS (Core Banking System). Furthermore, she added that this move would change how the Post Office Saving Scheme used to work, giving simple access to their accounts to all the accounts holders.
Currently, 1,50,000 post-offices serve more than 50 crores of their savings account customers through India Post Payment Bank (IPPB). This move will allow interoperability between banks & post offices, allowing faster and easier banking services.
Presently, post offices are not linked with CBS or Core Banking System and, therefore, they only allow limited deposits in their ecosystem. After this interlinking, 35 crores of Indian post office deposit accounts with a joint sum of more than ₹ 10 Trillion would get connected to the Core Banking System.
Longing for this connection for a while now, citizens see this announcement as one of the important announcements. It is finally going to provide some advantages for the layperson.
Also Read: Union Budget Highlights 2022
Here are some benefits of post offices getting connected to core banking:
Ease of Access
The biggest benefit the post office account holders will get is the easy transfer of their money. Earlier, to transfer money into a savings account, the only way possible was through a cheque; and it would take around 4-5 days before getting transferred. Now, with this move, account holders will be able to transfer their money directly into their account in an instant.
Win-Win for both Banks & Post Offices
This interlinking is beneficial for both post offices and banks. Firstly, the banks will have access to all the post office accounts and deposit holders. On the other hand, post offices can now tap into the profits by delivering ease of access to customers. Simply because the movement of the money will get easy & more customers will use post office schemes to save their money without scepticism.
After the CBS connectivity is complete, the experts suggest that the post offices will launch different online schemes. Not just to retain their existing 50 crore post-office savings account customers, but to entice the new upcoming generation who are new to the financial markets.
Push for Digital Economy in Rural India
A large chunk of the post offices’ 30 crore deposit account holders, combining a sum of more than ₹ 10 Trillion, comes from the rural parts of India. Once the CBS linking is complete, it will enhance the footprints of the digital economy in the nook and interior parts of our country.
The anytime, anywhere post office savings will benefit the post offices in acquiring new and retaining old customers. It will also give added advantages to the upcoming gen-z customers entering the world of personal finance for the first time and are searching for risk-free long-term investments.